EXCLUSIVE: How fire risk scores can lead to canceled insurance

Many people are unaware that a fire risk score even exists, until their insurance cancels their fire coverage. Here's what it is and who's calculating it:

Video Transcript

MICHAEL FINNEY: No, not at all. Every home has a fire risk score, but few homeowners know what it is or why it matters. Well that score could mean the difference between getting your homeowner's policy renewed, or not.

JOHN CAMPOS: I'm going to give you a quick view of our home and our--

MICHAEL FINNEY: John Campos takes us around his home and surrounding neighborhood in San Rafael. It has great views with plenty of green space. Maybe too much. His insurance company notified him, his fire insurance will be canceled in June due to high fire risk.

JOHN CAMPOS: As a consumer, I just I feel betrayed by the insurance industry.

MICHAEL FINNEY: John says he's worked with the San Rafael Fire Department and followed its recommendations to harden his property by ridding it of overgrown vegetation. He's even put in a fireproof roof and underlayment.

JOHN CAMPOS: We've gone through quite a different mitigation measures to make us less of a risk. However it doesn't seem to have helped any.

MICHAEL FINNEY: Insurance Commissioner Ricardo Lara has heard John's story, and doesn't think what happened to him is right.

RICARDO LARA: This is the classic case of why we need to make sure that if you've invested thousands of dollars that it takes to harden your home, you should be able to get coverage.

MICHAEL FINNEY: Lara is calling for more transparency in the fire risk score given to homeowners. The scores are calculated by companies hired by the insurance industry and largely unknown by the general public.

RICARDO LARA: I want the consumer to know why they got the score, how they could mitigate it, and how they can lessen their score. And then, hopefully then, they're able to keep their insurance policy.

MICHAEL FINNEY: Lara says his goal is to both reduce fire risk and the cancellation of home insurance policies.

RICARDO LARA: The insurance companies need to do their part, and through our regulatory process we're going to force them if need be to write policies in these areas. Once people have done the right thing, which is to harden a home, like the case with Mr Campos.

MICHAEL FINNEY: John Campos' insurance company, Pacific Specialty Insurance, declined to comment for this story. The American Property Casualty Insurance Association told us fire risk scores are a critical tool, and it looks forward to meeting with the insurance commissioner on the proposal. Dan, there is a lot of work to be done here.

- Yeah, there obviously is. But thank you for letting us all know about it, Michael.